Question One.
The costs incurred by Noriega Company to acquire land and construct a building
were as follows:

Requirements:
a. Determine the cost of land
b. Determine the cost of the building ( 3 Marks)
c. Assuming the residue value of the building is K60,000,000 and that the
economic life is Ten years, compute Noriega LTD Company’s depreciation
expense for Year 1, Year 2, Year 3 under the following methods
i. Straight line Method
ii. Double Declining Method
iii. The Sum of Years Digit (SYD) Method ( 2 Marks)
d. At the beginning of Year 4, Noriega LTD Company incurred an additional
Cost of K10, 000,000 in order to add a new wing to the building; as a result
the salvage value of the building is increased by k5, 000,000 and also
increased the remaining life of the building by 2 years.

i. Re- Calculate the depreciation for the next two years using the straight
line method. ( 3 Marks)

Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its products. These agents are paid a sales commission of 15% for all items sold.

Barbara Cheney, Pittman’s controller, has just prepared the company’s budgeted income statement for next year as follows:

*Primarily depreciation on storage facilities.

As Barbara handed the statement to Karl Vecci, Pittman’s president, she commented, “I went ahead and used the agents’ 15% commission rate in completing these statements, but we’ve just learned that they refuse to handle our products next year unless we increase the commission rate to 20%.”

“That’s the last straw,” Karl replied angrily. “Those agents have been demanding more and more, and this time they’ve gone too far. How can they possibly defend a 20% commission rate?”

“They claim that after paying for advertising, travel, and the other costs of promotion, there’s nothing left over for profit,” replied Barbara.

“I say it’s just plain robbery,” retorted Karl. “And I also say it’s time we dumped those guys and got our own sales force. Can you get your people to work up some cost figures for us to look at?”

“We’ve already worked them up,” said Barbara. “Several companies we know about pay a 7.5% commission to their own salespeople, along with a small salary. Of course, we would have to handle all promotion costs, too. We figure our fixed expenses would increase by $3,000,000 per year, but that would be more than offset by the $4,000,000 (20% × $20,000,000) that we would avoid on agents’ commissions.”

The breakdown of the $3,000,000 cost follows:

“Super,” replied Karl. “And I noticed that the $3,000,000 equals what we’re paying the agents under the old 15% commission rate.”

“It’s even better than that,” explained Barbara. “We can actually save $92,000 a year because that’s what we’re paying our auditors to check out the agents’ reports. So our overall administrative expenses would be less.”

“Pull all of these numbers together and we’ll show them to the executive committee tomorrow,” said Karl. “With the approval of the committee, we can move on the matter immediately.”

Required:

1. Compute Pittman Company’s break-even point in dollar sales for next year assuming:

a. The agents’ commission rate remains unchanged at 15%.

b. The agents’ commission rate is increased to 20%.

c. The company employs its own sales force.

2. Assume that Pittman Company decides to continue selling through agents and pays the 20% commission rate. Determine the dollar sales that would be required to generate the same net income as contained in the budgeted income statement for next year.

3. Determine the dollar sales at which net income would be equal regardless of whether Pittman Company sells through agents (at a 20% commission rate) or employs its own sales force.

4. Compute the degree of operating leverage that the company would expect to have at the end of next year assuming:

a. The agents’ commission rate remains unchanged at 15%.

b. The agents’ commission rate is increased to 20%.

c. The company employs its own sales force.

Use income before income taxes in your operating leverage computation.

Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial difficulty for some time. The company’s contribution format income statement for the most recent month is given below:

Required:

1. Compute the company’s CM ratio and its break-even point in unit sales and dollar sales.

2. The president believes that a $6,900 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $87,000 increase in monthly sales. If the president is right, what will be the increase (decrease) in the company’s monthly net operating income?

3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $36,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)?

4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by 0.80 cents per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,200?

5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $51,000 each month.

a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales.

b. Assume that the company expects to sell 20,300 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as well as in total, for each alternative.)

c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,300)?

Governmental Accounting is different than financial accounting. What are some differences?

So, how does governmental accounting relate to other business areas?

Why is it important that businesses be aware of how government does their accounting, or is it important to businesses?

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $22.75 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:  

The total cost of operating the company for the year is $333,000 which includes the following costs:  

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch—a 59-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $136.50 (600 square feet @ $22.75 per hundred square feet). Calculate the customer margin earned on this job.

Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.)

Required:

a. Assume that only one product is being sold in each of the four following case situations:

b. Assume that more than one product is being sold in each of the four following case situations:

(For all requirements, Loss amounts should be indicated by a minus sign.)

Assume that only one product is being sold in each of the four following case situations:

required A

required B

Mittler & Sons Inc. had the following purchases and sales transactions during the month of April 2019. Mittler uses the perpetual inventory method to account for inventory.

Date Activities Units Acquired at Cost Units Sold at Retail Apr. 1 Beginning inventory 20 units @ $3,000 per unit Apr. 6 Purchase 30 units @ $3,500 per unit Apr. 9 Sales 35 units @ $12,000 per unit Apr. 17 Purchase 5 units @ $4,500 per unit Apr. 25 Purchase 10 units @ $4,800 per unit Apr. 30 Sales 25 units @ $14,000 per unit Total 65 units 60 units Required

1. Compute cost of goods available for sale and the number of units available for sale.

2. Compute the number of units in ending inventory.

3. Compute the cost assigned to ending inventory using (a) LIFO, and (b) weighted average (round amounts to two decimals, If needed)

4. Compute gross profit earned by the company for both costing methods in part 3.
Reminder: Continue using the excel HW policies for preparing your solutions to the above questions, including the standard four line heading. (Please send through a memory card chip)(don't forget to use excel)

Sales Budget

FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high school. FlashKick’s best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, FlashKick expects to sell the following:

Required:

1. Construct a sales budget for FlashKick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter. If required, round your answers to the nearest cent.

2. What if FlashKick added a third line—tournament quality soccer balls that were expected to take 40 percent of the units sold of the match balls and would have a selling price of $42 each in January and February, and $45 each in March? Prepare a sales budget for FlashKick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter. If required, round your answers to the nearest cent.

QUESTION 21

1. Alpha Company has purchased 10,000 shares of stock of Beta Company for $50,000,000. This represents 20% ownership. What journal entry, if any would Alpha make in the following situation:

   Beta declares and immediately pays a dividend of $1 per share. Assume Alpha uses the equity  method of accounting for its investment? (3 points)

2. Refer to the same facts as the previous problem.  

   What would be the journal entry be if Alpha learns that the value of Beta’s stock has increased by $2 per share, and Alpha uses the equity method of accounting for this investment? (3 points)

3. Use the same facts as the prior problems. What journal entry, if any, would make in this situation?

   Alpha learns that Beta had a loss of $1 million. Assume Alpha uses the fair value method of accounting for its investment. (3 points)

4. 
   

Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands (000's)): Cash NGN 16,830 Notes payable NGN 20,460 Inventory 12,300 Common stock 22,700 Land 4,230 Retained earnings 11,350 Building 42,300 Accumulated depreciation (21,150 ) NGN 54,510 NGN 54,510 The subsidiary acquired the inventory on August 1, 2016, and the land and building in 2010. It issued the common stock in 2008. During 2017, the following transactions took place: 2017 Feb. 1 Paid 8,230,000 NGN on the note payable. May 1 Sold entire inventory for 18,300,000 NGN on account. June 1 Sold land for 6,230,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept.1 Signed long-term note to receive 8,230,000 NGN cash. Oct. 1 Bought inventory for 20,230,000 NGN cash. Nov. 1 Bought land for 3,230,000 NGN on account. Dec. 1 Declared and paid 3,230,000 NGN cash dividend to parent. Dec. 31 Recorded depreciation for the entire year of 2,115,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: 2008 NGN 1 = $ 0.0071 2010 1 = 0.0065 August 1, 2016 1 = 0.0085 December 31, 2016 1 = 0.0087 February 1, 2017 1 = 0.0089 May 1, 2017 1 = 0.0091 June 1, 2017 1 = 0.0093 August 1, 2017 1 = 0.0097 September 1, 2017 1 = 0.0099 October 1, 2017 1 = 0.0101 November 1, 2017 1 = 0.0103 December 1, 2017 1 = 0.0105 December 31, 2017 1 = 0.0130 Average for 2017 1 = 0.0120 Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2017? Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2017? (Input all amounts as positive. Enter amounts in whole dollars.) Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands (000's)): Cash NGN 16,830 Notes payable NGN 20,460 Inventory 12,300 Common stock 22,700 Land 4,230 Retained earnings 11,350 Building 42,300 Accumulated depreciation (21,150 ) NGN 54,510 NGN 54,510 The subsidiary acquired the inventory on August 1, 2016, and the land and building in 2010. It issued the common stock in 2008. During 2017, the following transactions took place: 2017 Feb. 1 Paid 8,230,000 NGN on the note payable. May 1 Sold entire inventory for 18,300,000 NGN on account. June 1 Sold land for 6,230,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept.1 Signed long-term note to receive 8,230,000 NGN cash. Oct. 1 Bought inventory for 20,230,000 NGN cash. Nov. 1 Bought land for 3,230,000 NGN on account. Dec. 1 Declared and paid 3,230,000 NGN cash dividend to parent. Dec. 31 Recorded depreciation for the entire year of 2,115,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: 2008 NGN 1 = $ 0.0071 2010 1 = 0.0065 August 1, 2016 1 = 0.0085 December 31, 2016 1 = 0.0087 February 1, 2017 1 = 0.0089 May 1, 2017 1 = 0.0091 June 1, 2017 1 = 0.0093 August 1, 2017 1 = 0.0097 September 1, 2017 1 = 0.0099 October 1, 2017 1 = 0.0101 November 1, 2017 1 = 0.0103 December 1, 2017 1 = 0.0105 December 31, 2017 1 = 0.0130 Average for 2017 1 = 0.0120 Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2017? Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2017? (Input all amounts as positive. Enter amounts in whole dollars.) Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands (000's)): Cash NGN 16,830 Notes payable NGN 20,460 Inventory 12,300 Common stock 22,700 Land 4,230 Retained earnings 11,350 Building 42,300 Accumulated depreciation (21,150 ) NGN 54,510 NGN 54,510 The subsidiary acquired the inventory on August 1, 2016, and the land and building in 2010. It issued the common stock in 2008. During 2017, the following transactions took place: 2017 Feb. 1 Paid 8,230,000 NGN on the note payable. May 1 Sold entire inventory for 18,300,000 NGN on account. June 1 Sold land for 6,230,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept.1 Signed long-term note to receive 8,230,000 NGN cash. Oct. 1 Bought inventory for 20,230,000 NGN cash. Nov. 1 Bought land for 3,230,000 NGN on account. Dec. 1 Declared and paid 3,230,000 NGN cash dividend to parent. Dec. 31 Recorded depreciation for the entire year of 2,115,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: 2008 NGN 1 = $ 0.0071 2010 1 = 0.0065 August 1, 2016 1 = 0.0085 December 31, 2016 1 = 0.0087 February 1, 2017 1 = 0.0089 May 1, 2017 1 = 0.0091 June 1, 2017 1 = 0.0093 August 1, 2017 1 = 0.0097 September 1, 2017 1 = 0.0099 October 1, 2017 1 = 0.0101 November 1, 2017 1 = 0.0103 December 1, 2017 1 = 0.0105 December 31, 2017 1 = 0.0130 Average for 2017 1 = 0.0120 Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2017? Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2017? (Input all amounts as positive. Enter amounts in whole dollars.)

Tioga Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the following information.

The total budgeted material-handling cost is $61,440.  

Required:

1. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one lens would be what amount?
2. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one mirror would be what amount?
3. Under activity-based costing (ABC), the material-handling costs allocated to one lens would be what amount? The cost driver for the material-handling activity is the number of material moves.
4. Under activity-based costing (ABC), the material-handling costs allocated to one mirror would be what amount? The cost driver for the material-handling activity is the number of material moves.

(For all requirements, Do not round your intermediate calculations.)

Accounts Receivable

The following table indicates the historical breakout of accounts receivable

The company uses the gross method of recording all sales on accounts.

Marketable Securities

The interest rate earned on marketable securities is 6.0%.

Inventory

In 20x2, the company had used the gross method to record inventory purchases on account. As of January 1, 20x3, the company is using the net method to record inventory purchases on account.

Prepaid Insurance

A three-year insurance policy in the amount of $7,200 was purchased on July 1, 20x2.

Equipment

Equipment is depreciated at an average amount of $3,000 per month.

Building

The current building was purchased on January 1, ten years ago and has an expected 40-year life at which time its salvage value will be $40,000.

Intangible Assets

Intangible assets were initially valued at $80,000 and are being depreciated over 40 years at $2,000 per year.

Short-Term Notes Payable

The one-year short-term notes payable are due on March 1, 20x3. The interest rate is 5.0% which is payable at maturity.

Long-Term Notes Payable

The long-term notes payable are due in ten years. The interest rate on the notes is 4.5%.

Bonds Payable

The bonds payable mature in twenty years. The interest rate on the bonds is 4.0%.

Mortgage Payable

The following amortization schedule can be used for the January, 20x3 mortgage payment on the 7.0%, 30- year mortgage.

Capital Stock

The capital stock is common stock at $10 par value with 50,000 shares authorized, and 10,000 shares issued and outstanding.

Journal Entries

Jan 1 Equipment with a historical cost of $10,000 and an accumulated depreciation of $3,000 was sold for $6,000

Jan   2 Equipment with a historical cost of $20,000 and an accumulated depreciation of $18,000 was disposed of with an additional disposal cost of $1,300.

Jan   2 Sanford Company borrowed $24,000 on a short-term discounted 90 day, 3.0% noninterest-bearing note payable.

Jan 3 Sanford Company paid $18,000 in advance for the 6 month rental of a warehouse.

Jan 3 Equipment with a historical cost of $50,000 and an accumulated depreciation of $35,000 was traded for new similar equipment valued at $75,000. Sanford Company received $14,500 as a trade in for the old equipment, paid $7,500 and established a 4.5% long-term note payable for the balance due.

Jan 4 Equipment with a historical cost of $35,000 and an accumulated depreciation of $20,000 was traded for new dissimilar equipment valued at $60,000. The salvage value of the old equipment was $5,000 and the trade in value was $7,000. Sanford paid $4,000 for the equipment and established a 4.5% long-term note payable for the balance due.

Jan 5 Sanford Company declared a dividend of $2.00 per share payable on February 10, 20x3 to all shareholders of record on January 20, 20x3.

Jan 6 The amount in wages payable and taxes payable was paid in full.

Jan 8 Sanford Company paid a total of $18,000 on accounts payable and was able to take advantage of $1,500 in purchase discounts for early payment. The original inventory purchase was recorded at the full amount (gross method).

Jan 15 Cash sales for two weeks equaled $22,000. The cost of inventory sold equaled $12,000.

Jan 20 Supplies in the amount of $4,200 were purchased for cash.

Jan 21 A customer who owed $10,000 on an account receivable, agreed to sign a 60-day note receivable with an interest rate of 6.0%. The interest earned on the note will be paid at the maturity date of the note receivable.

Jan 29 The balance of $14,500 in accounts payable was paid.

Jan 30 The company purchased $45,000 of inventory on account with the terms 2/10, net 30. The company has decided to switch to the net method for all inventory purchases on account beginning in 20x3.

Jan 31 Cash sales for two weeks equaled $24,000. The cost of inventory sold equaled $13,000.

Jan 31 Sales on account for the month of January totaled $55,000 with the terms 2/10, net 30. The cost of inventory sold equaled $26,000.

Jan 31 The unearned revenue represented the rental of special equipment that was used by another company on weekends. $4,000 of the revenue was earned in January.

Jan 31 Collected cash of $48,000 from the accounts receivable, plus there was a total sales discount of $1,000 for the payment of receivables within the ten day discount period.

Jan 31 Salary expenses in the amount of $14,000 and tax expenses in the amount of $8,000 were paid.

Jan 31 The utility bill of $2,500 was paid.

Jan 31 A bill in the amount of $3,600 for advertising expenses incurred during the month of January was received.

Jan 31 The monthly payment for January of the mortgage payable was made.

Feb 1 The Sanford Company made a new issue of 5,000 shares of common stock for cash. The market price of the stock was $40 per share.

Feb 2 A petty cash fund in the amount of $500 was established.

Feb 3 The Sanford Company bought back 1,000 shares of its own common stock for $40 per share.

Feb 8 The purchase of inventory on account on Jan 30th was paid in full.

Feb 10 Sanford Company sold the note receivable from Jan 21st to the bank, which discounted the note at 8.0%.

Feb 15 Cash sales for two weeks equaled $20,000. The cost of inventory sold equaled $11,000.

Feb 20 The company purchases $20,000 of inventory on account with the terms 2/10, net 30.

Feb 27 The company paid an advertising bill for $5,600 which included the February advertising expense of $2,000 plus the balance due from January.

Feb 28 Cash sales for two weeks equaled $25,000. The cost of inventory sold equaled $14,000.

Feb 28 The monthly payment for February of the mortgage payable was made.

Feb 28 The company collected cash of $59,000 from the accounts receivable, plus there was a total sales discount of $1,100 for the payment of receivables within the ten day discount period.

Feb 28 Salary expenses in the amount of $21,000 and tax expenses in the amount of $9,000 were paid.

Feb 28 The utility bill of $2,100 was paid.

Feb 28 Sales on account for the month of February totaled $60,000 with the terms 2/10, net 30. The cost of inventory sold equaled $30,000.

Mar 1 The short-term note payable that was due on March 1st plus all appropriate interest was paid.

Mar 3 The amount of the petty cash fund was increased by $200.

Mar 10 Supplies in the amount of $2,700 were purchased for cash.

Mar 15 Cash sales for two weeks equaled $27,000. The cost of inventory sold equaled $15,000.

Mar 20 Sanford Company reissued 300 shares of its own stock for $42 per share.

Mar 21 The bank notified Sanford Company that the note receivable from January 21st had not been paid. The bank collected the amount of the note plus the interest due and a $20 protest fee from Sanford Company. Sanford Company charged the full amount of the note receivable plus related fees against the customer’s account receivable balance.

Mar 25 The company purchased $50,000 of inventory on account with the terms 2/10, net 30.

Mar 28 The purchase of inventory on account on Feb 20th was paid in full.

Mar 29 The petty cash fund had $150 in cash and receipts in total amounts for the following expense categories: entertainment$160, travel $170, postage $90, and supplies $115. The petty cash fund was replenished.

Mar 30 Cash sales for two weeks equaled $20,000. The cost of inventory sold equaled $11,000.

Mar 30 The unearned revenue represented the rental of special equipment that was used by another company on weekends. $9,000 of the revenue was earned in March.

Mar 31 Sales on account for the month of March totaled $67,000 with the terms 2/10, net 30. The cost of inventory sold equaled $36,000.

Mar 31 Salary expenses in the amount of $16,000 and tax expenses in the amount of $7,000 were paid.

Mar 31 Collected cash of $70,000 from the accounts receivable, plus there was a total sales discount of $1,200 for the payment of receivables within the ten day discount period.

Mar 31 A warehouse building was acquired for $250,000. Closing costs on the acquisition equaled $7,000, and there were costs of $10,300 to get the building into an operational condition to be used by Sanford Company. Employee salaries specifically related to the building renovation were an additional $5,400. This salary expense was part of the normal monthly expenses and would have been incurred regardless of whether the employees worked on the warehouse or did other activities within the company. Sanford Company paid $100,000 in cash as a down payment with the balance due being added to the mortgage payable account.

Mar 31 The utility bill of $3,000 was paid.

Mar 31 Sanford Company repaid the 90 day discounted note payable from January 2nd in full.

Mar 31 The equipment depreciation entry for the three months of 20x3 was completed.

Mar 31 The depreciation entry for the building for the months of January, February, and March was entered.

Mar 31 The amortization of intangible assets for the three months of 20x3 was completed.

Mar 31 The bad debt expense based on the aging schedule for accounts receivable was determined for the three month period.

Mar 31 Salary expenses incurred during the month of March but not yet paid equaled $8,400 and tax expenses equaled $2,800.

Mar 31 A physical inventory of supplies indicated a total amount of $5,000 of supplies still on hand.

Mar 31 A customer sent an advance payment of $10,000 for the use of special equipment in April and May.

Mar 31 The amount of rent expense for the warehouse for the first three months of 20x3 was recognized.

Mar 31 Sanford Company provided services to a customer in the amount of $3,000 during March but a bill has not been sent.

Mar 31 The amount of insurance expense for the first three months of 20x3 was recognized.

Mar 31 The amount of interest earned on marketable securities for the three months of 20x3 was recognized.

Mar 31 The amount of interest expense for the total long-term notes payable for the first three months of 20x3 was recognized.

Mar 31 The amount of interest expense for the bonds payable for the three months of 20x3 was recognized.

Mar 31 The monthly payment for March of the mortgage payable was made.

Required

1.   Supply journal entries for each of the transactions. The numbers in the journal entries can be rounded to the nearest dollar.

1. What is the Cost Principle?and Definition of Cost Principle

2. give 3 example of Cost Principle

3. Some Issues with the Cost Principle

4. Short-Term vs Long-Term Assets

1. Fauna Inc has the following items at year-end:

Cash in First Bank                                                                  $15,000

Postdated checks                                                                         $450

Bank overdraft in checking account at Second Bank               $400

Savings account balance at Second Bank                               $2,600

Treasury bills maturing in 2 months                                      $2,500

Petty cash on hand                                                                      $600

Cash in Third Bank (bond sinking fund)                                $7,500

Customer checks waiting to be deposited                                 $650

Fauna should report cash and cash equivalents of

Required information

The Foundational 15 [LO2-1, LO2-2, LO2-3, LO2-4]

[The following information applies to the questions displayed below.]

Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments--Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):

Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.

Required:

For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base. For questions 9-15, assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments.

Foundational 2-1

1. What was the company’s plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)

2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

3. What was the total manufacturing cost assigned to Job P? (Do not round intermediate calculations.)

4. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

5. What was the total manufacturing cost assigned to Job Q? (Do not round intermediate calculations.)

6. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

7. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)

8. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)

9. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department? (Round your answers to 2 decimal places.)

10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

12. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations.)

13. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

14. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

15. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)